GSK to invest $490m in UK despite Brexit vote

GlaxoSmithKline's headquarters in London. Britain's biggest drugmaker, which had argued against Brexit before the referendum, believes the United Kingdom remains an attractive place for making medicines, thanks to a skilled workforce and relatively l
GlaxoSmithKline's headquarters in London. Britain's biggest drugmaker, which had argued against Brexit before the referendum, believes the United Kingdom remains an attractive place for making medicines, thanks to a skilled workforce and relatively low tax rates.PHOTO: BLOOMBERG

LONDON • GlaxoSmithKline (GSK) plans £275 million (S$490 million) of new investments at three drug manufacturing sites in Britain, signalling its confidence in the country despite last month's vote to leave the European Union.

Britain's biggest drugmaker, which had argued against Brexit before the referendum, believes the United Kingdom remains an attractive place for making medicines, thanks to a skilled workforce and relatively low tax rates.

The country's so-called patent box boosts profits from patented innovations by halving the rate of corporation tax. This tax relief, which favours pharmaceutical companies, has come under fire in recent days from the opposition Labour Party.

GSK said yesterday it was investing in sites at Barnard Castle, in the north of England, Montrose, in Scotland, and Ware, north of London.

It plans to increase production of next-generation respiratory drugs and biotech medicines. The vast majority of these products will be exported.

"It is testament to our skilled UK workforce and the country's leading position in life sciences that we are making these investments in advanced manufacturing here," said chief executive Andrew Witty.

Business minister Greg Clark said GSK's move was a clear vote of confidence in Britain and demonstrated that "there really is no place better in Europe to grow a business".

Meanwhile, demand for new medicines helped GlaxoSmithKline grow earnings in the second quarter and the drugmaker is set for big gains in the rest of the year, thanks to a weak pound, after Britain's vote to leave the European Union.

GSK yesterday announced that quarterly sales, in sterling terms, rose 11 per cent to £6.53 billion in the three months to June, generating core earnings per share up 42 per cent at 24.5 pence.

REUTERS

A version of this article appeared in the print edition of The Straits Times on July 28, 2016, with the headline 'GSK to invest $490m in UK despite Brexit vote'. Print Edition | Subscribe